Raytheon (RTN) topped third-quarter earnings topped analysts' views but revenue was light and the Patriot missile system maker's improved guidance still fell short of Wall Street views.
Estimates: Analysts expected Raytheon's Q3 EPS to rise 12.9% to $1.66 on a 4.4% increase in revenue to $6.04 billion.
Results: EPS from continuing operations jumped 21.8% to $1.79 while revenue rose 4.3% to $6.03 billion. Missile systems revenue climbed 9.4% to $1.8 billion on higher sales of its Paveway laser-guided bombs. Integrated defense systems revenue fell 6% to $1.3 billion. Backlog at the end of the quarter was $35.8 billion, up $2.2 billion vs. the year-ago-quarter.
Outlook: Raytheon told analysts it sees 2017 revenue growth of 3%-5%, with the midpoint slightly below the consensus estimate of 4.3%. Earlier, it raised its full-year EPS outlook to $7.28-$7.38, still below consensus of $7.41, up from a prior guidance of $7.13-$7.33, and boosted the low end of its sales outlook to $24.2 billion-$24.5 billion, vs. consensus for $24.45 billion, from an earlier outlook of $24 billion-$24.5 billion.
Stock: Shares were up early but reversed lower closed down 3.5% at 136.28 on the stock market today, diving below its 50-day average. On Wednesday, the stock rose 1.1% to 141.28, nearing a 143.49 buy point.
IBD's TAKE: Analysts are bullish Raytheon and other top defense stocks as military spending around the world is expected to increase on growing global tensions.
Raytheon's results come as Lockheed Martin (LMT) reported Q3 results topped that Wall Street views Tuesday, and raised its full-year outlook.
On Wednesday, Northrop Grumman (NOC) raised its full-year guidance after reporting Q3 results above analyst expectations, sending the stock into buy territory.
Boeing's (BA) Q3 results Wednesday topped analyst views. Revenue from its commercial airplanes division fell 4% and defense revenue fell 10%. During the company's conference call, officials said international customers accounted for 27% of defense revenue in Q3 and 38% of current backlog.
Shares of Lockheed dipped 0.6% Thursday, Northrop fell 1.2%, and Boeing retreated 1.5%.
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